Samsung Electronics Co’s contribution to smartphone camera lens supplier Largan Precision Co (大立光) is forecast to increase significantly this year, after the two firms settled a legal dispute over patent infringements, Yuanta Securities Investment Consulting Co (元大投顧) said in a report last week.
Samsung’s contribution is forecast to account for 7 percent of Largan’s total revenue this year, compared with about 1 percent last year, Yuanta said in a note on Thursday.
In addition to its front-facing camera designs for Samsung’s Galaxy S10 flagship smartphones, Largan is also expected to win more contracts for the South Korean brand’s rear-facing cameras in the next few quarters, it said.
Samsung on Wednesday revealed a trio of S10-series handsets ahead of MWC Barcelona, the largest mobile device event in the world. They feature triple-lens rear cameras, in-display fingerprint sensors, foldable screens and 5G technology.
Meanwhile, Xiaomi Corp (小米) unveiled its new flagship Mi 9, which is powered by Qualcomm Inc’s Snapdragon 855 chip and features 48 megapixel triple-lens rear cameras.
Overall, the newly released models reveal a clear upgrade trend for this year — including multi-lens cameras, in-display fingerprint readers and wireless charging — which would benefit selective component leaders, CMB International Securities Ltd (招銀國際證券) said in a report on Thursday.
“On top of this, we are excited about Largan’s launch of high-end products ... and look forward to the launch of its ‘secret weapon’ in the second half of 2019,” Yuanta researcher Nicole Tu (塗景婷) said in her note.
Tu did not specify what this "secret weapon" was, but said it is being developed in cooperation with smartphone makers and would help drive up Largan's average selling price (ASP) and gross margin (GM).
“We anticipate this ASP/GM driver will not be launched until late 2019, because this technology night require design changes for adjacent components as well,” Tu said.
Largan chief executive officer Adam Lin (林恩平) in October last year said the company was developing “black lenses,” which use a black coating to cover the front camera lens.
Companies in the Android camp, such as Samsung, Huawei Technologies Co (華為), Oppo Mobile Telecommunications Corp (歐珀) and Vivo Communication Technology Co (維沃), are expected to launch their new flagship devices in the second half of this year, which would drive demand for Largan's “secret weapon” and other high-end products, ensuring it maintains its industry-leading position, Tu said.
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